Description

First Majestic Silver: Initiation Of Coverage- Why $1.1 Billion Treasury Could Unlock The Next Big Silver Expansion!

First Majestic Silver reported a strong start to 2026, with production and financial results above guidance despite typically slower first-quarter operations. The company produced 3.5 million ounces of silver and gold output at 28% of midpoint guidance, reflecting effective operational management. Silver prices averaged $86.35, leading to record revenue of $477 million—up 95% year-over-year—and operating cash flow of $311 million. The firm chose to retain significant metal inventories, valued at $63 million, aiming to capitalize on expected higher future prices. Cost management remains a key focus for the company. Operating and all-in sustaining costs per ounce increased slightly compared to the prior year primarily due to a strategic lowering of cutoff grades, resulting in processing lower-grade ore but extending mine life. Additionally, profit sharing, royalties, and smelting expenses have risen in line with higher metal prices. Despite these cost pressures, margins expanded notably from $13 per ounce in Q1 2025 to $52 in Q1 2026. Diesel consumption exposure is minimal at 5%, mitigating recent fuel price volatility risks.